THE BUDGET IS DEVOTED TO TAXES OF VARIOUS HUES. BUT, ALL THESE LEVIES FIT INTO TWO CATEGORIES

Direct TaxesThis is the tax individuals and companies pay directly to the government. Income tax, wealth tax, and securities transaction tax fall in this category.

Indirect TaxesIt’s essentially a tax on expenditure. Levies such as customs, excise and service tax are examples of indirect taxes. They are considered regressive as they do not distinguish between the rich and the poor. So, most governments prefer to raise their revenues through direct taxes.

TAXING TIMESThese are some of the important levies charged by the government.Corporation (Corporate) TaxIt’s the tax companies pay on their profits. India Inc pays 30% of its profits to the government.

Taxes On Income Other Than Corporation TaxIt’s income-tax paid by individuals or ‘non-corporate assessees’. Income-tax rates range from 10% to 30%, depending on the income bracket.

Securities Transaction Tax (STT)If you’re dealing in shares or mutual fund units, you will have to pay a small part of the amount you pay or receive. In the Union budget for 2004-05, the government did away with the tax on profits earned on the sale of shares held for more than a year (known as long-term capital gains tax) and replaced it with STT.

CustomsAnything you bring from abroad, comes at a price. By levying a tax on imports, the government is achieving twin objectives: It’s adding to its revenues and protecting local industries.

Union Excise DutyThis is a duty imposed on goods manufactured in the country.

Service TaxYou pay the government when you eat out or visit your hairdresser. Your telephone bill will also have an item called service tax — it is a tax on services rendered.